Visa and MasterCard cut off Russia's sanctions-hit SMP Bank
21 March 2014 | 6589 views | 5
Russia's SMP Bank says that Visa and MasterCard have stopped processing transactions for its clients after the US imposed sanctions on its major shareholders.
On Thursday SMP Bank's owners - brothers Arkady and Boris Rotenberg - were among 20 Russians hit by US sanctions after president Vladimir Putin moved to annex the region of Crimea.
Within hours and without notification, card giants Visa and MasterCard reacted by cutting off payment services for SMP customers.
In a statement to Reuters, the bank says: "Due to the fact that the sanctions were imposed on shareholders and not on the bank, we consider the moves by the payment systems unlawful and we are confident that we can resolve the encountered difficulties in the near future."
Arkady Rotenberg has close tie with Putin, dating back to when the pair were members of the same judo club. The US says that the brothers have given "support to Putin's pet projects" and received billions of dollars in contracts related to the recent Sochi Olympic Games.
The 20 people targeted in the latest round of sanctions have "substantial resources and influence who provide material support to the Russian leadership," says president Barack Obama.
A financial institution, Bank Rossiya, has also been hit and will be frozen out of dollar transactions.
Visa and MasterCard have told Reuters that they have now resumed processing transactions for SMP customers.